International Finance Corporation (IFC) plans to provide a portfolio guarantee worth up to $50 million to French insurance giant AXA Group’s debt platform that will invest in emerging market infrastructure projects alongside the World Bank arm.
The plan is part of efforts to mobilise $500 million of private sector third-party capital, in addition to IFC’s investments, the private-sector lending arm of the World Bank said in a disclosure.
The debt platform plans to raise funding by issuing debt securities from AXA Group’s insurance companies.
IFC said its investment will be structured as an unfunded portfolio guarantee to the investor in the platform.
The initiative is being conducted under IFC’s Managed Co-Lending Portfolio Program (MCPP). Under the MCPP, IFC will conduct all investment origination and supervision.
The project appraisal, approval, commitment, and supervision are managed directly by IFC with the MCPP investor passively following its decisions.
IFC said the platform is being designed to facilitate participation of institutional investors such as insurance firms into emerging market infrastructure lending.
IFC is an active private equity-style investor in India and also backs companies through debt funding.
It is increasingly focusing on funding to infrastructure and renewable energy projects in the country.
In 2016, IFC had proposed to invest $125 million in two third-party debt platforms that will invest in infrastructure projects through the MCPP programme.